Free Republic

Free markets depend on truth telling. Prices must reflect the valuations of consumers; interest rates must be reliable guides to entrepreneurs allocating capital across time; and a firm's accounts must reflect the true value of the business. Rather than truth telling, we are becoming an economy of liars. The cause is straightforward: crony capitalism. Thomas Carlyle, the 19th century Victorian essayist, unflatteringly described classical liberalism as "anarchy plus a constable." As a romanticist, Carlyle hated the system—but described it accurately. Classical liberals, whose modern counterparts are libertarians and small-government conservatives, believed that the state's duties should be limited (1) to...

Capitalism is not economic anarchy. When properly defined, it recognizes several necessary conditions for the kinds of voluntary relationships it supports. One of these is the existence of inherent human rights, such as the right to make decisions, the right to be free, the right to hold property, and the right to exchange peacefully what one owns for something else. Capitalism also presupposes a system of morality. Under capitalism, there are definite limits, moral and otherwise, to the ways in which people can exchange. Capitalism should be viewed as a system of voluntary relationships within a framework of laws that...